M/S. NATIONAL TRANSPORT,KEONJHAR vs. PRINCIPAL CIT, CUTTACK CHARGE, CUTTACK

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ITA 179/CTK/2017Status: DisposedITAT Cuttack24 August 2018AY 2012-134 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found no reason to interfere with the Pr. CIT's findings, agreeing that the AO should have examined the issue of Section 40(a)(ia) applicability. The assessment order was set aside for fresh adjudication by the AO.

What were the facts?

The assessee's assessment order for AY 2012-13 was revised by the Principal CIT under Section 263 due to alleged lack of inquiry by the AO regarding applicability of Section 40(a)(ia) on interest paid to NBFCs without TDS. The Pr. CIT set aside the assessment order for fresh adjudication.

What were the issues?

Whether the Pr. CIT was justified in invoking Section 263 due to the AO's alleged lack of inquiry regarding the applicability of Section 40(a)(ia) on interest payments.

Which sections of the Income-tax Act were involved?

Section 263,Section 40(a)(ia),Section 143(3)

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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Hearing: 21/08/2018Pronounced: 24/08/2018

आयकर अपील�य अ�धकरण, कटक �यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAVAN KUMAR GADALE, JM ITA No.179/CTK/2017 (�नधा�रण वष� / Assessment Year :2012-2013) M/s National Transport, Vs. Principal Commissioner Station Road, Barbil, of Income Tax, Keonjhar-758035 Aayakar Bhawan, Shelter Square, Tulsipur, Cuttack-753008 �थायी लेखा सं./जीआइआर सं./PAN/TAN No. : AACFN 5605 J (अपीलाथ� /Appellant) (��यथ� / Respondent) .. �नधा�रती क� ओर से /Assessee by : None राज�व क� ओर से /Revenue by : Shri Saad Kidwai, CITDR सुनवाई क� तार�ख / Date of Hearing : 21/08/2018 घोषणा क� तार�ख/Date of Pronouncement 24/08/2018 आदेश / O R D E R Per Shri Pavan Kumar Gadale, JM: This is an appeal filed by the assessee against the order of the Pr.CIT, Cuttack, passed u/s.263 of the Act, dated 14.03.2017. 2. None appeared on behalf of the assessee when the case was called for hearing, neither any adjournment petition is filed by the assessee. Therefore, the Bench proceeded to dispose off the appeal of the assessee after considering the submission of ld. DR and the material available on record. 3. The assessee has raised the following grounds of appeal :- 1. For that the order U/s.263 of the I.T.Act, dt.14.03.2017 for the assessment year 2012-13 as passed by the Learned principal Commissioner of Income Tax, Cuttack is far from just and legal on the facts and in the circumstances of the case. 2. For that the Learned Principal Commissioner of Income Tax erred in initiating proceedings U/s.263 of the I.T.Act and

2 ITA No.179//17 cancelling the assessment order dt.05.03.2015 passed U/S 143(3) of the IT Act., without considering the submission of the appellant on the alleged ground i.e. lack of enquiry by the A.O. on the facts and in the circumstances of the case. 4. Brief facts of the case are that the assessee is engaged in the

business of contract works of transporting and loading and filed return of

income on 30.09.2012 for the A.Y.2012-2013 declaring total income of

Rs.4,07,87,000/-. Subsequently the case was selected for scrutiny under

CASS and notices u/s.143(2) & 142(1) of the Act were issued. In

compliance of the same, ld. AR appeared before the AO and case was

discussed. Thereafter the AO completed the reassessment assessing

total income at Rs.4,24,26,300/- and passed order u/s.143(3) of the Act,

dated 05.03.2015 and made disallowance of interest on investment

u/s.14A, disallowance of expenditure claimed under the head CSR

activities, disallowance of depreciation and disallowance of loss on sale of

asset.

5.

The Pr. CIT found that the order passed by the AO is erroneous

and prejudicial to the interest of Revenue and issued notice. Further the

Pr.CIT after considering the submissions of assessee and findings of the

AO has set aside the assessment order u/s.143(3) of the Act to the AO for

fresh adjudication.

6.

Aggrieved by the order of the Pr.CIT the assessee has filed an

appeal before the Tribunal.

7.

None appeared on behalf of the assessee, whereas ld. DR

supported the orders of Pr. CIT

3 ITA No.179//17 8. We have heard submissions of ld. DR and perused the materials

available on record. We found that the Pr. CIT while dealing with the issue

observed that the the AO should have examined the issue to ascertain

whether Sec.40(a)(ia) of the Act is applicable in respect of interest amount

actual paid to NBFCs without TDS. The observations of the Pr. CIT are as

under :-

4.

I have gone through the facts of the case from the assessment record and submission of the A/R filed on behalf of the assessee. I am of the view that the AO should have examined the issue to ascertain whether Sec.40(a)(ia) is applicable in respect of interest amount actual paid to NBFCs without TDS. 5. In this regard, reference can be made to the decision of Hon'ble Supreme Court in the case of Ramapyari Devi Sarogi (1968) 67 ITR84 and in the case of Smt Taradevi Agarwal Vs CIT 88 ITR 323 wherein the Hon'ble Apex Court held that lack of enquiry or verification at the relevant time by the AO would constitute prejudice to the interest of revenue and would involve error of fact and law. Similarly, the Hon'ble jurisdictional High Court in the case of Uma Shankar Rice Mills Vs. CIT ( 187 ITR 638) have observed that where the Commissioner felt that proper enquiry was not made by the AO during the assessment proceeding, he was justified in invoking the provision of section 263 in respect of the order passed by the AO. Even Income tax Act has been amended and explanation 2 has been inserted u/s 263(1) wherein it is clarified that an order passed by the AO shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue, if, in the opinion of the Principal Commissioner/ Commissioner, the order is passed without making enquiries or verification which should have been made. 6. In view of the above, the assessment order framed u/s 143(3) of IT Act dated 05.03.2015 passed by the AO for the A.Y. 2012-13 is hereby set aside to the AO for adjudication of the issues afresh and reframe the assessment after proper appreciation of facts and application of law and as per the observation and direction given above. Needless to say while reframing the assessment order, the AO should provide adequate opportunity to the assessee. Issue copy of this order to the assessee, to the Assessing Officer, to the JCIT, Range-l,Cuttack.

From the above factual material relied and observations of the Pr.CIT, we

do not find any good reason to interfere with the findings of the Pr. CIT

4 ITA No.179//17 and accordingly we confirm the same and dismiss the grounds of appeal of the assessee. 9. In the result, appeal filed by the assessee is dismissed. Order pronounced in the open court on 24/08/2018. Sd/- Sd/- (N. S. SAINI) (PAVAN KUMAR GADALE) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER कटक Cuttack; �दनांक Dated 24/08/2018 �.कु.�म/PKM, Senior Private Secretary आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant- 1. M/s National Transport, Station Road, Barbil, Keonjhar-758035 ��यथ� / The Respondent- 2. Principal Commissioner of Income Tax, Aayakar Bhawan, Shelter Square, Tulsipur, Cuttack-753008 आयकर आयु�त(अपील) / The CIT(A), 3. आयकर आयु�त / CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कटक / DR, ITAT, Cuttack 5. गाड� फाईल / Guard file. 6. स�या�पत ��त //True Copy// आदेशानुसार/ BY ORDER,

(Senior Private Secretary) आयकर अपील�य अ�धकरण, कटक / ITAT, Cuttack

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